Suppose YUCK! (YUCK), the parent company of many fast food chains that compete with McDonalds, currently has a dividend payout ratio of 40%. Its beta is 0.75 and its current dividend per share is $1.44 per year. Suppose YUCK has a return on equity of 11% and the risk-free rate is 2% while the expected annual return on the S&P 500 is 10%.

(a) At what price do you expect a share of YUCK to sell for today?

(b) At what price do you expect YUCK to sell in three years?

(c) It turns out that YUCK currently sells for $105. If you expect that YUCK’s market price will equal its intrinsic value 1 year from now, what is your expected 1 year holding period return on YUCK stock? What does this imply about under/overpricing and alphas?

The lee family is looking to buy a house in one of two suburban areas just outside of a major city, and air quality is a top priority for them. overall air quality is calculated by taking measures in 100 locations within each suburb and then calculating a measure of central tendency. in one suburb, there is a major bus station that creates very poor air quality at its location but has no impact in the surrounding parts of the suburb. in this situation, which measure of overall suburb air quality would be most useful?

Conor is 21 years old and just started working after college. he has opened a retirement account that pays 2.5% interest compounded monthly. he plans on making monthly deposits of $200. how much will he have in the account when he reaches 591 years of age?

Which of the following statements is correct? a major disadvantage of a partnership relative to a corporation is the fact that federal income taxes must be paid by the partners rather than by the firm itself. in a typical partnership, liability for other partners’ misdeeds is limited to the amount of a particular partner’s investment in the business.true in a limited partnership, the limited partners have voting control, while the general partner has operating control over the business, and the limited partners are individually responsible, on a pro rata basis, for the firm’s debts in the event of bankruptcy. partnerships have more difficulty attracting large amounts of capital than corporations because of such factors as unlimited liability, the need to reorganize when a partner dies, and the illiquidity of partnership interests.